Aces Ballpark deal OK'd by Reno City Council

Nov. 8, 2012

The Reno City Council narrowly agreed to move forward with a $1 million annual general fund payment for Aces Ballpark on Wednesday as part of a refinancing deal to keep the stadium solvent and the Aces in town. / RGJ file

Written by

Also on the agenda

• Reno citizens will have single-stream recycling by the end of next year. They will put all recyclables in one bin instead of sorting recyclables into various containers. 3A• City Council on Wednesday began talks to potentially retool a sales tax reimbursement agreement for the Summit Sierra shopping center. 3A

On RGJ.com

Read city of Reno reporter Brian Duggan’s blog, “Reno Memo,” on RGJ.com/renomemo. Also, follow him on Twitter with @brianduggan.

More

Related Links

The Reno City Council narrowly agreed to move forward with a $1 million annual general fund payment for Aces Ballpark on Wednesday as part of a refinancing deal to keep the stadium solvent and the Aces in town.

The 4-3 vote in favor featured the same arguments the City Council expressed last month when the deal was first presented to refinance a $55 million construction loan used to build Aces Ballpark, which opened four years ago.

Those in support of the public subsidy on the City Council said the stadium boosts the quality of life in Reno as well as nearby businesses. Those opposed said Reno should not use its general fund to refinance the stadium while the city is still struggling to pay for police, firefighters and parks.

That loan was supposed to be financed by property tax revenue from the Reno Redevelopment Agency, but that plan fizzled because of the recession and the subsequent property value decline in downtown Reno.

Because that $55 million construction loan was going to come due late next year, the owners of the Reno Aces, primarily backed by real estate mogul Herb Simon, proposed the new deal with the city to use general fund payments instead of property taxes to refinance the debt. Without the public deal, Simon said he would cut his losses in Reno and move the team elsewhere.

Under the deal approved Wednesday, the Aces can’t leave Reno for 30 years as long as the city makes good on the $1 million payment.

Meanwhile, a $6 million loan used to move a Reno fire station and is held by the Aces owners will be retired after 10 years of $1 million payments from Reno.

The Aces owners also gave up development rights to the first floor of the National Bowling Stadium. The stadium will become publicly owned after 2043 once the final $1 million payment is made.

Washoe County is expected to consider a similar $500,000 payment to the Aces Ballpark deal, too.

The Aces owners also are looking for a property-tax break on the stadium, which already includes about $1.6 million in back property taxes and penalties that the owners have been challenging.

(Page 2 of 2)

Owners 'stepping up'

Councilman Pierre Hascheff, one of the votes in favor, said the Aces owners agreed to several concessions in the deal such as increasing their annual lease for the stadium from $1 per year to $1 million.

“Talk about somebody stepping up to be a partner to keep that stadium open,” said Hascheff, who was joined by Mayor Bob Cashell and councilmen Dave Aiazzi and Dan Gustin in voting yes.

Councilwoman Jessica Sferrazza joined council members Dwight Dortch and Sharon Zadra to oppose the general fund payment, expressing concerns over potential negative effects to the city’s credit rating if a payment is missed over the next three decades.

Sferrazza added, “If the city is going to start investing in baseball stadiums, then maybe we should get a percentage of the profits.”

Zadra asked if other sources of revenue could be used to help pay off the refinancing deal.

For example, a proposed ticket surcharge for Aces games will be enacted in the coming months. Zadra asked why that surcharge couldn’t cover all of Reno’s costs, but city staff said the ticket surcharge is only dedicated to the Aces lease payment and operating costs.

For Dortch, the $1 million was too much to ask when the city is still trying to recover from the recession.

“We’ve had layoffs, we’ve seen our general fund go down $35 million since the start of this recession,” he said. “We have fewer cops on the streets today than we’ve had since mid 1990s.”

He added, “We’re still trying to stop the bleeding from the recession.”

That was a concern echoed by Zadra: “We have a city that we need to run and we have services that we have not been providing to their fullest, and it’s beginning to show.”

Aiazzi said the city has taken risks on development projects in the past, including the river walk and downtown movie theater.

He said the agreement to refinance the ballpark will keep Triple-A baseball in Reno, which is starting to recover from the recession.

“This is good for the social fabric of this town,” he said. “You’ve got small business people in this town who say this is good for my business.”